Shrinking empire of India's biggest retail czar

In the past six months, Kishore Biyani, India's biggest retailer, has sold two businesses and plans to splice his remaining empire into three companies, each focused on a distinct segment: Fashion, groceries and home improvement, and food and fast-moving consumer goods.

Biyani's plan is to deleverage the balance sheet of Pantaloon Retail, his flagship, and simplify the group's organisational structure.

Will it work?

Experts are keeping their finger crossed.

"It's a good beginning, but divestments and restructuring alone may not be sufficient to solve Biyani's problem. Ultimately, he will have to ensure his companies start delivering operationally," says a senior analyst with Edelweiss Capital.

Her scepticism is not misplaced.

The company's operations have repeatedly failed to generate enough cash flows, forcing the company to turn to lenders or investors to keep itself going.

The company had negative cash flows from operations in three of its last five financial years.

In all, in these five years, the company's operations generated a negative cash flow of over Rs 1220 crore.

Not surprisingly, the company or its various subsidiaries and special purpose vehicles have raised debt and equity in each of the last five financial years.